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tv   Nightly Business Report  PBS  October 1, 2014 1:00am-1:31am PDT

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garabedian. this is "nightly business report" w with tyler mathisen a zbaifrg. separate ways, ebay spins off its fast-growing pay pal unit marking a sharp reserve in strategy as the mobile payments strategy changes very quickly. >> going to be very quickly focused on performance and we're a very competent group that will deliver returns that our clients expect. pimco's make chief investment officer and ceo tell investors the world's largest fixed income asset manager is moving forward without its former manager, bill gross. if it isn't broke, why ford is making a big change to its best selling vehicle for the past 43 years.
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all that and more on tuesday september 30th. good evening, everyone, they say that breaking up is hard to do. but not at ebay apparently. the on-line ebay auction says it plans to spin up its lucrative pay pal division into a separately traded company sometime last year. the announcement is a drama immigraic reversal f ebay would benefit from a split. investors lining up to take part and shares up 8%, lining up for what it means to ebay investors. >> ebay's corey e commerce payments will stand on their own, a move the company believes will make sense, ebay only 15% of the business. >> as we continue, looking
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forward to 3.5 years, we think the competitive position and the competitive environment of commerce and payments are going through accelerating change that creates new sets of opportunities and challenges for both ebay and pay pal, and that operating independently and separate will give ebay and pay pal focus, strategic flexibility, and an ability to move quickly and decisively in this changing environment. >> investors reacted positively to the plan sending shares going way up today, none more pleased than carl icahn, the investor who first proposed a spin-off back in february. in a statement today he praised ebay's change of course calling it a no-brainer that will enhance values for shareholders, a sentiment voiced by another active shareholder and analyst, saying this will allow pay pal to be better evaluated.
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>> it will compete directly with apple pay, we recently downgraded it. google wall will be more of a competitor next year. i think the one element that opens up is the concept that alibaba could purchase the marketplace. >> but challenges do remain, on both businesses they face steep competition, from brick and mortar retailers and financial service companies like american express. however, two stand-alone companies will allow investors to better assess those risks. for "nightly business report," i'm morgan brennan at the nasdaq in new york city. ebay's decision to split off a pay pal is creating a lot of buzz in the payments world increasingly populated by companies promising to make it easier for retailers to accept and for consumers to me payments from their mobile phones. mary thompson now with the who's who in the mobile payments space.
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>> ebay's breaks up with paypal, splitting up the business just over 40% of its revenue, for assignment watchers there is a pay off in payments. >> i think in the split we think there is value in the payment side efforts value i dates what apple and others are doing. >> what apple is doing with its soon to be launched apple pay is hoping to get a piece from the rapidly growing mobile payoffs. the amount should be up from 205 billion. hundreds are competing for a piece of the consumer's digital wallet. the analyst says with so many options, consumers and retailers don't want to commit to just one.
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>> there is still so much that needs to be sorted out with retailers what they prefer to accept and consumers what provides them a value for use are their phone. >> in the mobile space there are a few firms pulling away from the crowd, thanks to new technology or established systems that are just too expensive to replace. industry watchers says that means winners will be mature network operators, like visa, master card, and american express. it doesn't matter if a person pays for a purchase at the register, on line or with their phone. if the payments are made with a credit card linked to their networks they get a cut. all three are working with one of the newest players in mobile pay, apple. a firm experts see becoming a leader. the tech giant creating an eco system before the launch of apple pay, selling a phone with pre-installed app with hundreds of mayerchanmerchants.
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>> i think it bodes well for the longer term success. >> others see pay pal being replicated in mobile, meaning? things like the big players are likely to stay the same for now. for "nightly business report," i'm mary thompson. a big story that broke last week is still a big topic of discussion on wall street, the resignation of bill gross from pimco, the massive asset management firm he helped to create, well, today the new ceo and dan iverson spoke with the growth and how the firm will carry on without him. >> bill gross resigned last week, we had in place a succession plan that had been in process all during the course of this year. bill was going to leave eventually, we all knew that, whether it was friday or next
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year, we put our plan in place and moved forward. >> bill gross was a brilliant investor. we moved forward in terms of a manager. we as a team will move forward with a model based more on teamwork. >> despite reports of billions from out-flows from pimco in the wake of bill gross's decision on friday, the vast majority of clients will stay with the firm. >> on wall street, stocks were up and down before ending the day and the monday of september to the down dde, but the major averages did wrap up the third quarter with gains, the dow fell 28 points, the nasdaq lower by 12. s&p 500 off by 5 and a half. for the just completed third quarter the dow was up a half percentage, the s&p saw its seventh quarter in a row of gains, but they were small, two thirds of a percentage point. half a world away from wall street, thousands of protesters took to the streets of hong kong
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again closing banks and other businesses. so how are big companies dealing with thousands of workers being unable to get to their offices and what could be the long-term impact on business. from beijing, eunice yoon has more. >> reporter: hong kong is seen as the financial center on par with new york and london. the chinese city is a former british colony and for many wall street banks hong kong is an important base in asia. so far the disruption from the ongoing protests in hong kong has been minimal. companies have been preparing contingency plans ever since they indicated they would block the downtown business and shopping businesses to send a message to the communist party. banks had to cut services in some parts of the city, other firms such as black rock have told their staff that they can work from home. the uncertainty has caused
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uncertainty in the stock market. some don't see long-term effect on hong kong's standing unless the protests continue and weigh in on the economy. however, others say it is what make hong kong different from the rest of china. they say the real risk is if beijing cracks down on the city, undermining hong kong's role as aateway for china and one that attracts international investors because of the rule of law. for "nightly business report," i'm eunice yoon. and so how will the policies affect the u.s. markets in the fourth quarter? let's find out from liz saunders, the chief investment strategist. >> good to see you. >> hi, tyler. >> for fourth quarter, what do you expect to see? possible pullback, what? >> when the s&p first hit 2,000 it was not because it hit the magical number or a technical condition, the internal markets
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looked shaky, they were not keeping up with the generals as they often say. sentiment was very stressed. that told us that you were -- had an increased likelihood of getting the typical kind of mid-term election year pullback, september was not a great month, you saw the pick-up and volatility. i don't know whether we'll see that in just small caps but it would be helpful to get a bit of a pullback, that said i think the market is still intact. >> why is that? >> first of all what happened five years ago was a secular bull market. that doesn't mean you don't have corrective phases, but all the conditions in place, secondary markets in place this time. we haven't built anywhere near the excesses in the economy or the stock market that tend to precede bear market type of pullbacks. so corporate earnings are still moving higher. leading indicators are still moving up.
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ca capital spending is just starting to pull back up. most of the excesses are not in place right now. that is why i think any corrective phase would likely be just that, a pull back in an ongoing market. >> let's talk about the strong market, it has not been this strong for this long in quite sometime. and that can pinch the earnings of multi-nationals. have we started to see that? what will you look for as the earnings reports come out this month in. >> you know, the s&p is a little less exposed globally than it has been in the recent past because we have been moving a lot of business back to the u.s. we're in the energy renaissance, manufacturing renaissance, that is why the trade deficit is coming down. you're right, when you have a surge in the dollar like we've seen i would expect some companies to talk about it. that said, 68% of the u.s. economy is consumer spending and you look at the impact that the strong dollar has down on
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commodity prices prices, it is a net big positive for not only the u.s. economy but also for the stock market. i think we're in a similar environment as we were in the '90s, where the dollar will go up and so will the stock market. >> let me ask you this, at charles schwab, you're obviously in talks with a lot of investors, many of our viewers. number one, what type of feedback are you getting from them in terms of investor confidence and sentiment. number two, what types of things are you telling them to do? because this is a tricky time in the market, and don't say everybody is different. just roughly, what are you telling the individual investors to do with their portfolio? >> and you're right, it depends on the investor, but we think there is frothiness in the market and there is a likelihood of a pullback that tends to happen in mid-election years. more often than not, it is a buying opportunity. depending on where your a
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allocation is, it could be seen as an opportunity. it is a tricky piece, you normally get -- actually, the average pullback in an election year is 18%, i don't think we'll get that. again, i believe it is an ongoing bull market, but that is what we're telling the investors. i would say the mood of the investors is not quite as optimistic as what some of the traditional sentiment investors tell you. there is some optimism, there is a lot of skepticism, a lot of all right, i'm in the market but looking for the next shoe to drop. tell me what the risk is, what is the next thing that is going to come around to surprise us. there is a lot of wariness for the down side and i believe that is a good sign that this wall of worry that the market likes to climb is still intact. >> liz ann, great to see you again, liz ann saunders with charles schwab. coming up, why ford is making a big change to its vehicle, the f-150, at a time when investors are questioning
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the near-term outlook. that is next. in the story that broke late today and could color trading tomorrow, the centers for disease control and texas health officials have confirmed the first ebola case diagnosed here in the u.s. the patient had recently traveled to west africa and is being treated in a hospital in west dallas. shares of the drug maker techmera, spikes in after hours trading, alone along with sarepta therapeutic. and they were just mentioning ample global supplies, west texas crude oil
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off nearly $3.5 a barrel today, ending just a buck, 91. that is the biggest percentage drop for oil in almost two years, brent slumped below 95, meanwhile. >> not only are oil prices fa falling, so are prices at the pump. triple a says there are at least 26 states where drivers can find at least one station selling below three a gallon. ford is betting on a radical change for the f-series pickup. becoming lighter and more fuel efficient. while no mileage has been posted yet, some models can get more than 25 miles a gallon on the highway for a truck. the panels will be made of lighter weight aluminum and not steel. phil lebeau takes us for a ride deep in the heart of texas.
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>> this is not your typical test drive. then again, this is not your typical truck. the truck is 700 pounds lighter to be greater than 25 miles per gallon on the highway. one reason why? panels on the truck are now made out of high strength aluminum, not steel. >> you think about all the improvements that come with the f-150, not just the fuel efficiency but the fuel component, the driving, the acceleration, this changes the game. this is the best truck we've ever made. >> that is saying something, since the f series has been the best selling vehicle in america every year since 1982. it is also incredibly profitable. ford makes an estimated 8 to $10,000 in profit out of every f-series ever sold, making it a very risky move. now, despite gas prices falling
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ford believes they will make a pickup that is fuel efficient. >> the aluminum panels on the new f-series don't sound like the steel panels on the previous f-series but this is not like pushing in on a tin can. this is high strength aluminum alloy. and ford says the panels will meet the latest safety and durability tests. >> we're extremely confident in this test, testing over ten miles durability on this truck. remember, the strength, the hard core part of the truck is stronger with more hard steel. >> going lighter while promising stronger in a market where truck buyers like build and bold pickups. phil lebeau, "nightly business report," san antonio, texas. and general motors is set to announce a new road map, ceo
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mary barra is set to announce goals tomorrow including a strategy to boost company profits and what it calls marketing the leading vehicles. shares have fallen 20% since january, when barra was appointed ceo. and we begin tonight's market focus with the media company that is buying move inc., the owner of realtor.com, for $950 million. the company owns one of the most trafficked websites for property in the u.s., giving the wall street journal a chance to expand in the data market. shares fell, move inc. up 37 to 20.96. and the video streaming site, announcing crouching tiger, hidden dragon, the legend, set to be released in 2015, to be released on netflix
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and imax theaters, shares rose up to $451.18. european union regulators revealed details in a letter today why they believe that tax deals granted to apple in ireland were illegal. authorities claim that ireland avoided international tax rules by letting apple shelter profits in return for maintaining jobs. apple says it has received no selective treatment. despite all of this shares of apple were up slightly to $175.00. follow up to the current window's 8 operating system to be known as window's 10, the company skipped number nine in naming the new software. the universal flagship is aimed at capturing the new business
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market. shares were off to 36.46. and walgreens reporting a loss in the fourth quarter after the huge accounting charge from its recent acquisition of the swiss beauty company, alliance boost. it also warned that profits will continue to struggle because of lower drug reinvestment rates, stock closed at $59.27. mixed news in housing to tell you about, the house index price shows they rose a bit less, year over year, the increase was slower than 20 years and down more than a percentage point in june. of the 20 biggest cities in the index, san francisco washe only metro area to see prices decline in july. despite that broad-based slowdown in home price gains, many would-be first time home buyers are not moving in and not picking up the slack in sales.
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but are millennials really against home sales are just victims against tougher times. diana olick has more. >> reporter: millennials don't buy houses, they are savvy, and first generation rent. >> younger people seem to have a less attitude toward housing. i don't know why, i'm not one of them. >> reporter: but do they really? >> i wouldn't say that the entire generation is anti-home ownership. >> reporter: meet these millennials, married with condo. >> we started to work right out of college, so we were able to save money over the years. >> reporter: yes, they have student debt. yes, they love urban life. yes, they see no reason for a phone connected to the wall s. and yes, their rent just kept rising, so last year they bought their first home in the heart of d.c. >> when it started to even out and numbers matched up kind of
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figured it was time. >> reporter: both 28, ken and ashley are older than their parents were when they got married. and that is the crux of it. millennials are getting married and having children later in life, the two biggest drivers of home ownership. but that can be an advantage. >> are you both smarter borrowers than your parents? >> i think so. >> one of the most important things for me was understanding what we were getting ourselves into. understanding all of the intricate deals with a mortgage and the lending process. >> reporter: by virtue of being older, millennials may be wiser home buyers and lived through the recession, knowing more about buying homes than their parents did. unlike their parents, they don't want the house in the suburbs, a stereotype that holds up. >> we plan to stay in the city
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for as long as we possibly can. >> bad news for the nation's builders who still believe this generation will ultimately outgrow its urban life-style and head for greener pastures or any lawn at all. for "nightly business report," i'm diana olick in washington. coming up, hitting the jackpot, just how big does the gambling industry have on the u.s. economy? we're going to las vegas, baby, next. an update now on the bankrupted rebel casino in atlantic, according to the wall street journal, they currently have the highest offer of $94 million topping that of real
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estate developer glenn straub which made an initial cash bid of $90 million. and finally tonight, the american gaming association is out with a report on the gaming industry's impact on the economy. and with new casinos being built across the country, new products are being added to keep customers coming through the door. jane wells has more from las vegas. >> reporter: gaming in america is proving you win some, you lose some. las vegas is rebounding, atlantic city is struggling. several gaming companies are competing to expand in states like massachusetts. and for the first time the industry has commissioned a study on gaming's economic impact on the american economy. it is kind of a big deal. >> we employ 1.7 million people, actually larger than the airline industry, we contribute a quarter of a million dollars to the economy and taxes to local and state governments around the
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country. >> reporter: hoping to grow those numbers, companies in las vegas are debuting new slot machines. >> i dare you to play this game without laughing, you cannot do it. >> reporter: at the same time, casino floor space is las vegas is getting smaller. ly -- millennials don't play slots as much as older americans, and the casinos are looking to make money, mgm is building with ab adjacent park for half a billion dollars. >> it is a very different experience. >> reporter: to keep people in the casino, machine companies are making games more social. >> we find that slot players really like to have a community experience so we have developed some games where they share in a bonus, our game of dragon goes between the various machines and selects one of the five players of that bank to get a bonus. >> reporter: one of the biggest challenges remains a lot of regulations, regulators are
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reluctant to make the skill space even though it would attract younger players. then there are all the rules to moving the machines across state line. >> if you look at all the different regulations, there are a million different regulations that manufacturers have to adhere to as they move equipment across the country. >> reporter: as they try to move more of the equipment as the states open up to gambling. believing that it will get ey easier could be a bad bet. >> and that is it for us, i'm susie gharib. >> and i'm tyler mathisen, thank you for joining us, hope to see you right back here tomorrow night.
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the following kqed production was produced in high definition. this time on "spark" -- first, "spark" goes inside the world of bhangra -- a traditional indian dance that's been revitalized by a generation of young indian-americans. >> when you listen to this music, it's almost like this chemical gets released into your body, and it's just a really contagious beat. next, the contemporary jewish museum is dedicated to the exploration of jewish art and culture. their new exhibit asks artists to riff off of a ceremonial seder plate. >> my seder plate is about the exodus of the jewish people through the millennia. then, the music of the crooked jades harkens back to a musical era known as "old time" -- next on spark.

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